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Exploring Micron, BofA, JD, Alibaba, Facebook, and Tesla’s Trading Day
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF TSLA
Today’s commentary has been condensed. Back to normal tomorrow.
The S&P 500 gapped higher on September 10, and held steady the rest of the day, around 2,880. The good news, the move higher although uneventful may have snapped the downtrend the index had been in the past week or so.
Pretty much every sector moved higher, except for the banks. I still think the banks are one group to avoid. Analyst’s earnings estimates forecast growth to slow dramatically for almost all the banks next year. Throw in a yield curve that continues to flatten, and I can’t find a good reason to be in these stocks. I know everyone screams about the buybacks. But the XLF is up only 1.5 percent this and is up about 6.5 percent from its June lows. Still, the technical chart looks weak to me. Sorry folks, I don’t like the banks, and I think the XLF heads lower, no higher despite the buy-backs.
For Bank of America, support comes around $30.30.
Micron continues to struggle after last week’s sharp decline. It seems like this $45.25 zone is a battleground between the buyers and sellers. The stock has stayed at that price since Thursday afternoon. Unfortunately, I think the sellers win, and that means the stock heads to $42. The stock has shown almost no ability to rise, which means there are bigger sellers around just sitting on it.
Well if there is glimmer of hope for JD, it is that its stock retest the lows from September 5, and has held for now around $26.10. That is good news, for owners of the stock. The key here is for the stock to have a significant follow-through higher tomorrow. It could be a sign of a bottom being put into place. But it still to soon to call a bottom, not yet.
We can’t say the same for Alibaba yet. $151 is looking more likely.
Tesla’s shares seem to have broken free of that terrible downtrend from last week. For Tesla long’s we can hope that the path of least resistance is back to $300.
For now, Facebook also found support around $160.
Today was a relatively dull day. But perhaps the more important piece is that trends remained in place, while some stock managed to find some levels of stability. Hopefully, tomorrow gives more clarity.
That is going to be it.
Michael Kramer is the Founder of Mott Capital and the creator of Reading the Markets.